Upbit Singapore, a subsidiary of South Korean crypto exchange Upbit, has announced that it has received an in-principle approval from the Monetary Authority of Singapore (MAS) for a Major Payment Institution (MPI) license under the Payment Services Act (PSA).
What is an MPI license and why is it important?
An MPI license is a type of license that allows a payment service provider to offer digital payment token (DPT) services in Singapore. DPTs are commonly known as cryptocurrencies or virtual currencies, such as Bitcoin, Ethereum, and Ripple.
The PSA is a new regulatory framework that came into effect in January 2020 to regulate various payment services in Singapore, including DPT services. The PSA aims to promote innovation, ensure consumer protection, and enhance cyber resilience in the payment sector.
Under the PSA, any entity that provides DPT services in Singapore must obtain a license from MAS, unless exempted. The license categories are Standard Payment Institution (SPI), Major Payment Institution (MPI), and Money-Changing Licensee (MCL).
An SPI license allows a payment service provider to offer any combination of payment services specified in the PSA, except for DPT services. An MPI license allows a payment service provider to offer any combination of payment services specified in the PSA, including DPT services. An MCL license allows a payment service provider to conduct only money-changing services.
The MPI license is the most comprehensive and stringent license category among the three. To obtain an MPI license, a payment service provider must meet various criteria, such as having a minimum base capital of S$5 million, complying with anti-money laundering and counter-terrorism financing rules, implementing robust risk management policies and systems, and safeguarding customer funds and assets.
How does this affect Upbit Singapore and its customers?
Upbit Singapore is one of the leading crypto exchanges in Singapore and the Asia-Pacific region. It was established in 2018 as a joint venture between Upbit Korea and local firm Dunamu. It offers trading services for over 100 digital assets, including Bitcoin, Ethereum, Litecoin, and XRP.
Upbit Singapore has been operating under an exemption from MAS since 2020, pending the outcome of its license application. The exemption allowed Upbit Singapore to continue providing DPT services to its customers without a license until July 28, 2023.
However, with the in-principle approval from MAS, Upbit Singapore is now one step closer to becoming a fully licensed crypto exchange in Singapore. The in-principle approval means that MAS has agreed to grant Upbit Singapore an MPI license in principle, subject to certain conditions being met.
According to Upbit Singapore’s announcement on October 16th, some of these conditions include:
- Completing independent audits on its financial statements and internal controls
- Submitting detailed operational plans and policies
- Obtaining relevant insurance coverage
- Implementing enhanced customer protection measures
Once Upbit Singapore fulfills these conditions and receives the full MPI license from MAS, it will be able to operate as a regulated crypto exchange in Singapore with greater legitimacy and credibility. This will also benefit its customers, who will enjoy higher standards of security, transparency, and accountability from Upbit Singapore.
What are Upbit Singapore’s future plans and vision?
Upbit Singapore’s founder and CEO Alex Kim said that the in-principle approval from MAS is a strategic milestone for the company to deepen its presence in Singapore. He added that once the full license is granted, Upbit Singapore will exit from its current “stealth mode” and increase the list of digital assets available, along with liquidity and institutional offerings.
Upbit Singapore is also part of Upbit APAC, a global digital asset group that includes regulated crypto exchanges in Indonesia and Thailand, as well as VerifyVASP, a travel rule solution provider. The group plans to accelerate its expansion towards global, institutional, and infrastructure focused businesses.
Azman Hamid, chief compliance officer of Upbit Singapore, said that the company is committed to building trusted digital asset businesses in Singapore. He also said that through engaging collaboration with the regulator, businesses and communities, Upbit Singapore will contribute to further establish Singapore as the leading hub for the next generation of financial businesses.
Upbit Singapore’s in-principle approval from MAS is a significant development for the crypto industry in Singapore and the region. It shows that MAS is supportive of innovation and growth in the payment sector, while ensuring that the risks and challenges are adequately addressed. It also demonstrates that Upbit Singapore is a reputable and reliable crypto exchange that adheres to high standards of compliance and governance.
